A litany of studies has shown that today’s younger buyers simply don’t engage in the vehicle sales process in the same way their parents did a generation before.
Vehicle information is ubiquitous online and the manner in which a member of generation X and generation Y decides to purchase a vehicle from your store can seem like a convoluted and circuitous route through digital realms, third-party listing sites and social media.
In an effort to untangle the path, Patrick McMullen V-P of sales for MAX, presented a series of strategies for capturing gen-Xers and Yers.
“Cars used to be the great new technology offerings in generations past,” he explained. “When the newest car models came out, people would flock to dealership to check out the new cars. Now people have new technology to obsess over. Young people have smartphones and tablets.”
Combine that with the idea that young people, on average, are getting their driver’s license later (the number of U.S. 16-year-olds who got their license in 2012 dropped by nearly 20 per cent compared to 1983); high fuel and insurance prices; the rise in popularity of car sharing programs; youth migration into metropolitan areas; and steep youth unemployment, and the slice of the pie in understandably thin.
McMullen revealed data from a study performed in conjunction with Incisent Labs on the digital decision journey taken by 25 to 39-year-olds who were late model, pre-owned intenders.
Subjects started their searches online with commitment to one specific brand or model. Research was performed by ethnographic research – researches recorded how shoppers navigated the web – and with a quantitative survey of intenders and purchasers.
First up, he said, was to ask people what they classify as the biggest influence on what vehicle they buy. Nearly 50 per cent said information they learned online while 21 per cent said friends and family. Less than 20 per cent said the dealer and 13 per cent said they relied on their existing knowledge.
The study found that based on the customer’s bio info and what it called a mission (which essentially meant differentiating points like five-seater, safety ratings, design, etc.), each shopper started with an initial consideration set (ICS) of brands or vehicles.
“We found that online activity during ICS, traditional upper funnel activities like reading articles, reviews and research were not typical user behaviour.”
Rather typical behavior involved exploring ICS through VIN-specific online inventory listings.
“They went straight to the online shelves. They went to places like third-party providers and the online searches were more educational rather than predictors of purchases.”
Get on the List
How can dealers end up in a young buyer’s ICS? While dealers and OEMs have limited influence on the ICS, data revealed it was key to focus on having great online inventory on all sites across the web.
“If you have 100 vehicles on your lot and you are on 20 different sites online, you have 2,000 different listings online that you need to be standing tall on every single day. Listings also have to be education,” he explained, “and point out not only the differentiators with your vehicle over your competitor’s vehicle, but also the differentiators with your dealership.”
Researches said dealers have to explain why their car is better and why their dealership is better, noting dealers can always refer to consumer reviews, crash test ratings and dealership awards in their vehicle listings.
As Internet research continued, a trend MAX termed as the active evaluation phase, it found OEM sites were most often used for information on trims and options included – information McMullen said can easily be included your online vehicle listings.
During one case study, an L.A.-based shopper looking for a Honda Civic, Toyota Corolla or some type of Hyundai sedan spent 54 minutes online. Her expanded search looked as follows:
- Google search of “best SUV” (despite her ICS being all sedans) that led to a U.S. News World Report, which eventually led to reading about the Honda Fit.
- She then went back to Google and searched “2011 best used cars” and clicked on an Edmunds.com story titled 2011 used-car best bets.
- She read about the Ford Fiesta and Ford Focus.
- She went back to Google again and searched “best used cars,” which led her to Consumer Reports’ website and its reliability ratings.
- She then navigated to AutoTrader.com and searched for a Honda Fit, Ford Fiesta Hatchback and Ford Focus.
Despite having an ICS of Honda, Hyundai and Toyota sedans, her search pattern suggested she widened her ICS to include three new nameplates. On average, MAX found the number of brands expanded during the active evaluation phase from 2.2 brands at the start to 3.8.
The additional brands came from Internet reviews, word of mouth, in-store interactions and past experiences, product marketing, incentives and education from online experience.
What causes younger buyers to make the leap from intenders to buyers?
McMullen said their study determined the primary reasons that triggered a purchase was consumers connect with an online listing that caused them to visit dealership; they were physically at dealership to test drive a model and a salesperson converted the sale; or that an external event created urgency in their life including accidents, a new long commute to work or growth in family.
What Can Dealers Do?
Getting on a young customer’s initial consideration set and/or being added during the active consideration phase is tough. The best method, MAX reported, was to create robust listings and ensure they are easy to scan and capture key takeaways
When a shopper then comes to your dealership, he said, use that as an opportunity to help them achieve goals by finding out their needs and matching them with a vehicle.
Don’t forget to focus on digital, he added. Young people use technology and social media all the time. Be mobile. Be social.
“You have to create the most attractive and compelling digital inventory to ensure your inventory beats the competition every time all across the web. You also need to empower your management team with tools to ensure disciplined execution online with all of your vehicles.
“That is what will increase your online conversion of today’s younger car buyers.”